2018 Predictions From Bitcoin And Blockchain Experts

Bitcoin grew from a price of $960 USD on January 1 to $17000 USD today – an 1800% increase – with institutional money pouring in, bitcoin futures opening up, and the establishment of over 100 cryptocurrency based hedge funds going live. Despite the wild fluctuations, risks, and regulatory grey zones, cryptocurrency is trending up, and is in fact one of the fastest growing industries of our generation. So in an industry that changes seemingly by the second, with vast potential and growing real world applications, what can we expect to see in the year ahead?

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We wanted to share some predictions from bitcoin and blockchain experts on what trends and developments to look out for in 2018-- from widespread consumer adoption of crypto, to the industries that will embrace blockchain next.

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"2018 will be one of the best years for cryptocurrency yet and push the market to levels we haven't seen before. Until now it has been primarily retail investors pushing the price of bitcoin and other cryptocurrencies. With a futures market and options to reduce the risk profile, more institutional investors will finally be able to start jumping in. Traditional funds have risk levels that have prevented them from entering the volatile cryptocurrency market. But with financial instruments finally starting to be created, we could see trillions of dollars in institutional money flow in over the next few years."

“As we move forward in 2018 and beyond, more and more entities will adopt a blockchain infrastructure for data integrity and transparency as they see the benefits from those that are currently using blockchain. There is increasing demand for companies to implement technology and procedures to prove the integrity of their data as we hear about data breaches, deleted emails, and fraud almost daily in the news. Adopting a blockchain infrastructure allows companies to send a message to everyone that they care about the integrity of their data and would like to build trust with their customers, partners and stakeholders. 2018 will be the beginning of widespread blockchain implementation.”

“In 2018 we will likely see social media platforms such as Reddit, Medium or YouTube integrate a blockchain token to reward and incentivize their content creators. We started seeing this happen in 2017 with the Kik messenger platform launching their own crypto token to create a micro economy within their app, and Steemit—a Reddit-like platform that utilizes it’s own blockchain and cryptocurrency. We also saw the arrival of the Brave web browser with it’s crypto-token, BAT, that is used to reward users for their "attention" to content or ads. In general, we will see more media platforms using digital currencies to reward users for their involvement.

Another development we’ll see in the coming year are some large established companies offering a pilot service or product on a public blockchain. We already saw some movement in this direction in 2017 with insurance giant AXA offering flight delay insurance on the Ethereum blockchain. Established companies are very cognizant of how institutions that ignored the internet in the 90s were consumed by web startups, and they don't want to be similarly blindsided with the arrival of blockchain technology. They recognize it’s either start experimenting with a blockchain, or go the way of blockbuster.”

Jonathan Chou, CEO of Bee Token:

“According to blockchain.info, the amount of unique bitcoin addresses grew from ~500,000 in Jan 2017 to ~700,000 in Nov 2017. Meanwhile the price went from $1,000 to almost $10,000 in the same time period. The user growth is severely lagging behind the price movement. 2018 will see the first wave of everyday applications that gets blockchain into the hands of the everyday user starting from obvious case studies like Uber for blockchain or Airbnb for blockchain.”

“In 2018, we can expect to see many developments in the field of blockchain network governance. These include mechanisms to establish how consensus is reached, how updates are decided on and, most importantly, which stakeholder should have the final say over a network’s development. With Bitcoin’s User Activated Soft Fork (UASF), or Lisk’s Delegated-Proof-of-Stake consensus mechanisms, we can expect future solutions that help make crucial decisions about a project’s future.

The issue of scalability will be another hot topic continuing into 2018. Current blockchain frameworks are still lagging behind when compared to transaction speeds offered by traditional competitors such as VISA or Mastercard. The industry will need to find new solutions and optimise code to a point where competitive levels of responsiveness can be achieved. This is one of the reasons why Lisk is implementing sidechains. Ensuring well-distributed network activity and improving processing speed on the network is essential.”

“In 2016 everyone was talking about the DApps. 2017 was all about ICOs. 2018 will be about DAOs. Governance is the key ingredient in making blockchain projects more efficient and fair compared to legacy solutions, in addition to built-in evolutionary capabilities that will make them more successful than their traditional counterparts. Creating proper incentives through governance will help with adoption and encourage positive behaviour, especially preventing scammy or malicious actors stealing money. The more these new blockchain based tools and networks are used, the more value will be created for those using them.

What we need in the space is accountability, which is gained through transparency. Transparency will keep people accountable for their actions and make them more trustworthy. We have to work on the fundamentals of the protocols we use, because without them, we wouldn’t exist. So there needs to be an emphasis on that, with funds allocated to core development. Tokens can be leveraged to incentivise community members to strive toward a common goal. We will see the usage and thus value of cryptoassets increase in the near term as more and more people discover the benefits of removing unnecessary intermediaries.”

In 2018 we will see a high number of experienced entrepreneurs developing solutions on blockchains (using existing blockchain technology as well as building new blockchains). We will also see a high number of incumbent banks piloting behind-the-scenes-infrastructure type blockchain projects (for more efficient settlement of interbank transactions). We expect a huge surge in use cases of blockchain beyond today’s main use case areas, as well as regulation tightening on ICOs. 2018 will also see a major breakthrough in the scalability of blockchains.

“Blockchain is a powerful tool that can bring positive change in many industries, and we foresee that advancements in encryption technology and cryptography, coupled with blockchain, will be the recipe for success in the security industry in 2018. For instance, the Equifax data hack is something that needed more than just blockchain to have prevented it. While blockchain technology could have really helped customers assert more control over their own personal data owned by the company, bad security practices would have left them vulnerable, with or without blockchain.

Where blockchain's security features will really come into their own will be in their coupling with IoT. With an ever-increasing number of connected devices, 2018 will need blockchain's security architecture to protect IoT applications and users from sophisticated data breaches. I strongly believe that 2017 was only a trailer for what is to come in 2018 across the entire blockchain ecosystem and sector.”

“This will be another big year for the blockchain, a year that overall will show maturation and growth for the space. This growth in entrepreneurial innovation around the blockchain is the result of a unique combination of promising financial returns for entrepreneurs, and the opportunity to undertake impactful entrepreneurial endeavors without the immediate fear that looms over innovation in most areas of tech today - being copied or eaten by the tech giants. Multiple areas in technology and innovation are essentially dominated by the leading tech giants, who have a unique advantage hen it comes to developing the infrastructure and leading products in AI, AR/VR, autonomous vehicles, and multiple other promising areas of innovation. Blockchain, however, is unique in this context, as it is one area to which these tech giants have little incentive to enter in the short-medium term, as it undermines the business model they thrive on. Therefore, additional capital and talent is pulled into the blockchain space at unprecedented rates. I believe that by the end 2018, we'll see over 50M people worldwide holding at least one cryptocurrency, and that we will see at least a couple of blockchain products adopted by a large user base.”

"2018 will be the year of mass public awareness for Bitcoin and cryptocurrency. It is going to be the year when every friend and relative will want to know how much you have and how to purchase it. The topic of Bitcoin is going to be the ultimate water-cooler conversation. And the conversation won’t just be about the staggering price and wild volatility. Starting around February or March of 2018, the main topic of conversation will be about how to report tax liability. People who have Bitcoin will be looking for solutions like NODE40 Balance. Throughout 2018 we are going to see lots of media stories about new Bitcoin millionaires being under investigation by the IRS for neglecting to self report their gains. My big concern over the next five years is what happens to the industry when people begin to realize that Bitcoin is not “a Peer-to-Peer Electronic Cash System.” Where will Bitcoin's floor be when its lack of utility becomes apparent to investors? My hope is that Bitcoin will continue to maintain value as a form of digital gold, and the promise of digital cash will be fulfilled by Dash."

“We’re going to see Bitcoin emerge as a payment network. Currently Bitcoin is being used as a speculative asset and store of value. But as scaling solutions like the lightning network emerge, bitcoin’s utility dramatically increase along with its price. The real question is will it be the bitcoin ‘main chain’ that has the courage to adopt these upgrades or will it be another chain like Bitcoin Cash?”

Dmitry Zhulin, Co-founder of INS Ecosystem

“For 2018 I expect to see blockchain becoming a widely adopted mainstream technology, transforming a whole host of industries from financial services and retail, to logistics and medicine. As blockchain technology continues to shape the world we live in, Bitcoin is expected to further grow to approximately $30-40,000 in 2018 based on its convenience and further adoption as a means of payment and capital preservation. As Bitcoin booms, regulation will first frame ICOs and then move on to cryptocurrencies however it is difficult to now predict if this will have a positive or negative outcome for the industry. Despite an increase in regulation in the crypto space, I believe that blockchain as a technology will not be hindered by heavy regulation.”

"2018 will be the year institutional investors enter the cryptocurrency industry. Less volatility in Bitcoin will allow continued expansion in alternative cryptocurrencies. We will also see the rise of securities tokens in response to increased regulation. Conservatively, I’ll predict the entire industry to reach a market cap of $5 Trillion by the end of the year."

Mark Lurie, CEO of Biddable:

“In investing, there’s going to be a strong push toward diversifying cryptoassets and handling crypto investment management the way investors look at traditional assets and investing. You’re going to see a focus on that as investors settle into their newfound crypto wealth.

There will be a shakeout in ICOs and a flight to quality. There will be a proliferation of ICOs where a few will go bust. There will be a lot more institutional capital that will all go to the highest quality projects. That’s what happened during the financial crisis with venture capital and growth equity rounds, too. Most companies could not raise any funds, but those that could raise funds did it in really high valuations. Even though it was in the middle of the financial crisis, there was a capital flight to quality.”

“We all know that 2017 was a banner year for cryptocurrencies and the blockchain. Based on this, we see even bigger achievements on the horizon for 2018. While a significant percentage of the consumer population is either using, or at least comfortable with cryptocurrencies, the same cannot yet be said of governments and institutions. This is to be expected, as organizations, both public and private, tend to have longer learning curves in adopting new technologies. We sense that this learning curve will be the focal point of cryptocurrency and blockchain developments in 2018, overcoming many of the obstacles that have prevented public and institutional involvement in this sphere. This will bring everybody onto the same page, greatly enriching the potential of these technologies with the participation of influential entities, unlocking functionality that would not be possible otherwise. Between continued institutional investment in cryptocurrencies, the offering of bitcoin-based futures, and governments beginning to work on their own blockchain projects, there are already symptoms of these technologies catching on at the public and institutional levels. We therefore predict that 2018 will see sustained growth and adoption, building on existing progress to date by welcoming new stakeholders.

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. -
Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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